UK Financial Conduct Authority considers easing prediction market ban

The UK’s Financial Conduct Authority (FCA) is considering relaxing its 2019 ban on retail investors accessing prediction markets. These markets, which function as binary options where users wager on the outcome of specific events, were previously restricted due to concerns regarding high risks of loss and potential fraud.

The regulator is reportedly exploring this shift because many UK consumers are already bypassing domestic restrictions to trade on international platforms like Kalshi and Polymarket using VPNs. Transaction volumes on these platforms have seen significant growth, rising from under $5 billion in September 2025 to approximately $24 billion by April 2026.

Legalizing these markets presents regulatory challenges. The FCA would need to overturn its existing binary options prohibition, and operators may require gambling licenses. The UK Gambling Commission has indicated that prediction markets dealing in non-financial events, such as political outcomes, may be classified as betting intermediaries.